A Poisoned Chalice for Local Government
This paper analyses the implications for English local authorities of the Government’s consultation document on the replacement of council tax benefit (CTB). Local authorities now have 18 months to design, construct and introduce their own replacement for CTB, a means-tested benefit with nearly six million recipients. There is still a lot of uncertainty: a consultation document is, after all, never definitive.
The bulk of the paper examines the options facing local authorities as they struggle to devise schemes that satisfy the stringent conditions set out by the Government. The discussion is organised under two headings, concerning the extent of support that is guaranteed to pensioners, and the possible ways of meeting the requirement for a 10% cut in the overall amount of CTB. The paper’s conclusion considers what the consultation document tells us about the real meaning of “localisation” and the dangers that this version of it poses to local authorities.
In summary, the three main messages of the paper are as follows:
- The extent to which pensioners are to be guaranteed support is unclear and almost certainly does not follow from the Government’s basic principle of protecting those who are vulnerable. This has consequences both for the financing of a CTB replacement and for its complexity.
- Except perhaps in a handful of local authorities with a fairly high proportion of CTB going to recipients in working households, the 10% cut cannot be achieved without workless, working-age households paying some council tax. Given the difficulties in collecting small sums from households who have no money to spare, we would expect most authorities to absorb the cut through reduced expenditure elsewhere. Absorbing the cut in this way does not spare local authorities from the need to introduce complex schemes to assess eligibility.
- Under the guise of “localisation”, the replacement of CTB is actually a policy-making process in which central government departments assert their right to decree the outcomes they want without taking responsibility for seeing that those outcomes can be achieved. In agreeing to make this all work, local authorities face administrative, financial and political risks.